Advance Tax: AY 2022-23

For the financial year 1.04.2021 to 31.03.2022 i.e. AY 2022-23 :

Third Installment of ADVANCE TAX for the FY 2021-22 is due on 15.12.2021

75% of the estimated tax liability is to be paid on or before 15.12.2021.

Pay on time and avoid levy of penal interest.

If advance tax to be paid Contact at office Mobile No. 93745 36342 for CHALLAN at the earliest.

CA Raju Shah

ADVANCE TAX 2ND INSTALLMENT

Advance Tax: AY 2022-23

For the financial year 1.04.2021 to 31.03.2022 i.e. AY 2022-23 :

Second Installment of ADVANCE TAX for the FY 2021-22 is due on 15.09.2021

45% of the estimated tax liability is to be paid on or before 15.09.2021.

Pay on time and avoid levy of penal interest.

If advance tax to be paid Contact at office Mobile No. 93745 36342 for CHALLAN at the earliest.

CA Raju Shah

Non renewed Fixed Deposits to attract less interest – RBI Directions

RBI has revised its Instruction with respect to where a Fixed / Term Deposit matures and remains unpaid/unclaimed 

As per the existing instruction, if a Term Deposit matures and proceeds are unpaid, the amount of left unclaimed with the bank shall attract rate of interest as applicable to savings deposits.

However, as per RBI revised instructions, if a Term Deposit (TD) matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings account or the contracted rate of interest on the matured Term Deposit, whichever is lower.

RBI/2021-22/66

DoR.SPE.REC.29/13.03.00/2021-2022 July 02, 2021

All Scheduled Commercial Banks (including RRBs)

All Small Finance Banks

All Local Area Banks

All Primary (Urban) Co-operative Banks/ District Central Co-operative Banks/

State Co-operative Banks

Dear Sir / Madam,

Review of Instructions on Interest on overdue domestic deposits

Please refer to Section 9 (b) of Master Direction – Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 dated March 3, 2016, and the Master Direction -Reserve Bank of India (Co-operative Banks- Interest Rate on Deposits) Directions, 2016 dated May 12, 2016 in terms of which if a Term Deposit matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings deposits.

2. On a review of these instructions, it has been decided that if a Term Deposit (TD) matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings account or the contracted rate of interest on the matured TD, whichever is lower.

3. The relevant section of Master Directions are amended accordingly as indicated in the Annex.

Yours faithfully,

(Thomas Mathew)

Chief General Manager

ANNEX

Amendments to Master Directions

Sl. No.Existing SectionAmended Section  
A. Master Direction – Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 dated March 03, 2016 (Updated as on February 22, 2019)
Section 9 (b)  Interest on overdue domestic deposits  Interest on overdue domestic deposits
 If a Term Deposit matures and  proceeds are unpaid, the amount left  unclaimed with the bank shall attract  rate of interest as applicable to savings  deposits.  If a Term Deposit (TD) matures and proceeds are unpaid, the amount left  unclaimed with the bank shall attract  rate of interest as applicable to  savings account or the contracted rate  of interest on the matured TD,  whichever is lower.  
B. Master Direction – Reserve Bank of India (Co-operative Banks- Interest Rate on Deposits) Directions, 2016 dated May 12, 2016  
Section 9 (b)  Interest on overdue domestic deposits  Interest on overdue domestic deposits  
 If a term deposit matures and proceeds  are unpaid, the amount left unclaimed  with the co-operative bank shall attract  rate of interest as applicable to savings deposits  If a Term Deposit (TD) matures and  proceeds are unpaid, the amount left  unclaimed with the co-operative bank shall attract rate of interest as  applicable to savings account or the contracted rate of interest on the  matured TD, whichever is lower    

TDS on purchase of Goods under section 194Q of Income-tax Act, 1961

CBDT has  vide Circular No. 13 of 2021 dated 30/06/2021 issued clarification on section 194Q and interplay of Section 194Q, 206C(1H) AND 194O.

Key Points:

1. TDS on Amount Excluding GST
TDS under section 194Q should be deducted exclusive of GST, if charged separately. However for TCS on sale of goods – section 206C(1H), GST is to be included.  In case, tax is deducted on advance payment or on paid basis, tax has to be withheld on the amount including Gst since at that point of time, it is not possible to segregate the Gst from invoice for goods.

2. Purchase Return
In case of purchase return where TDS u/s. 194Q was done at the time of purchase, TDS deduction is allowed to be adjusted against future supply of goods by the same seller. In case the goods are replaced by the seller for the same value, there is no need of any further adjustment.

3. Computation of Turnover limit
Turnover/ Gross receipts of 10 cror of buyer for applicability of this section 194Q will mean Turnover/ Gross receipts in business only/ from business carried on by him. Hence, receipts by way of rent, interest, capital gain etc if not considered as business income, are not to be included in calculating the threshold of Rs.10 crores.

4. Cut off Transactions

TDS liability u/s. 194Q is either on payment or credit whichever is earlier. Therefore, if either of two events happened before 1st July, 2021, that transaction would not be subjected to provisions of Sec. 194Q of the Act.

5. No TDS if tax already collected by seller u/s. 206C(1H)
If tax has been collected by the seller under sub-section (I H) of section 206C of the Act, before the buyer could deduct tax under section 194-Q of the Act on the same transaction, such transaction would not be subjected to tax deduction again by the buyer.

6. Not Apply in First year of incorporation
The provision of Section 194Q shall not to apply in first year of an entity, as there is no turnover / gross receipts in the preceding year since the entity was not in existence.

7. No TDS on import of goods
Non-resident without permanent establishment are not covered under the ambit of section 194Q. Thus, no TDS deduction on the import of goods.

7. Exemption from TDS u/s. 194Q
(a) Transactions in securities and commodities through defined recognised stock exchanges and recognised clearing corporations located in IFSC

(b) Transactions in electricity, renewable energy certificates and energy saving certificates traded through power exchanges. However kindly note that purchase of electricity which has been held as goods by Hon’ble SC is tax deductible u/s 194Q.

(c) The provisions of Section 194Q of the Act shall not apply on purchase of goods from a person, being a seller, who as a person is exempt from income tax

TDS norms from July 1, 2021

Rules mandate tax deduction at a higher rate in case I-T returns are not filed by specified persons.

The Finance Act 2021 amended rules relating to tax deducted at source come into effect from July 1. These rules mandate tax deduction or tax collection at a higher rate in case the income tax returns are not filed by certain specified persons.  

New provisions introduced in the Union budget 2021-22 come into effect from July 1. as per the new provision the tax deductor/collector is required to check if the income earner has filed the returns for the previous two years if the amount of TDS deducted is 50,000 or more.

The new income tax portal has provided the facility to check by entering the PAN numbers. If the returns have not been filed, then the TDS deducted will be double the existing TDS rate or at rate of 5%, whichever is higher.

Does the new TDS norm apply to all categories?

No. Salary income, provident fund payments, TDS on lottery and horse racing have been excluded.

Since it kicks in from July 1, returns of which year would be checked?

Since the norms are effective from July 1, the previous financial years of 2018-19 and 2019-20 will be considered for checking the return filing for the transactions in current financial year 2021-22.

As a taxpayer, why should I be concerned about these new TDS norms?

The new provision will play a key role in making society more tax compliant and will also facilitate businesses in checking the compliance in a very easy manner. Hence, taxpayers are advised to regularly file the return of income every year to avoid extra tax through the increased rates of TDS in the new provisions.

NPS new withdrawal rules

NPS, as we know, is a government-run investment scheme that gives the subscriber the option to set the preferred allocation to different asset classes. It offers two kinds of accounts — Tier 1 and Tier 2 — for instruments including government bonds, equity market and corporate debt.

The Pension Fund Regulatory and Development Authority (PFRDA) has recently allowed the National Pension System (NPS) subscribers to withdraw the full contributions in one go without purchasing annuity if the pension corpus is equal to or less than Rs 5 lakh.

In simple words, this means that subscribers can withdraw their entire money at one go if the pension corpus is up to Rs 5 lakh.

At present, beneficiaries can withdraw up to Rs 2 lakh from their NPS account. Beyond this limit, the pensioners can withdraw 60 percent of the contributions. At least 40 percent of the contributions have to be mandatorily parked in government-approved annuities, according to the current rule.

Currently, it allows investors to prematurely withdraw only after the completion of three years, where the withdrawal amount cannot exceed 25 percent of contributions made by the subscribers.

Withdrawal is allowed only against the specified reasons, for example—higher education of children, the marriage of children, for the purchase/construction of the residential house (in specified conditions) and for treatment of critical illnesses.

The subscribers can make a partial withdrawal a maximum of three times during the entire tenure of subscription under NPS. The partial withdrawal request can be initiated online by the subscriber.

Additionally, PFRDA has increased the maximum age of entry into the NPS from 65 to 70. The exit age limit has also been extended to 75 years.

In a gazette notification, the pension regulator has also stated that the premature withdrawal limit on a lumpsum basis for NPS has been increased to Rs 2.5 lakh from Rs 1 lakh.

ADVANCE TAX FOR AY 2022-23

Advance Tax : AY 2022-23

For the financial year 1.04.2021 to 31.03.2022 i.e. AY 2022-23 :

First Installment of ADVANCE TAX for the FY 2021-22 is due on 15.06.2021

15% of estimated tax is to be paid on or before 15.06.2021

Pay on time and avoid levy of penal interest.

If advance tax to be paid Contact at office Mobile No. 93745 36342 for CHALLAN at the earliest.

CA Raju Shah

ALL ABOUT SOVEREIGN GOLD BOND SCHEME 2021-22

Sovereign Gold Bond Scheme 2021-22. Read Schedule of issuance, eligibility, redemption, Tax treatment, Nomination and other Terms and Conditions  

The Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds. The Sovereign Gold Bonds will be issued in six tranches from May 2021 to September 2021 as per the calendar specified below:

Sr. No. Tranche Date of Subscription Date of Issuance
1. 2021-22 Series I May 17–21, 2021 May 25, 2021
2. 2021-22 Series II May 24–28, 2021 June 01, 2021
3. 2021-22 Series III May 31-June 04, 2021 June 08, 2021
4. 2021-22 Series IV July 12-16, 2021 July 20, 2021
5. 2021-22 Series V August 09-13, 2021 August 17, 2021
6. 2021-22 Series VI August 30-September 03, 2021 September 07, 2021

The Bonds will be sold through Scheduled Commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognized stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Eligibility for Investment-

The Gold  Bonds under this  Scheme  may be held by a Trust, HUFs, Charitable Institution, University or by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any  other individual.

Denomination, Subscription limit and Pricing

The bonds will be issued in denominations of one gram of gold or multiples thereof. The minimum limit of subscription for the Bonds is one gram and maximum limit per fiscal year is 4 kg for individuals/ HUF and 20 kg for trusts and similar entities notified. In case of joint holding, the above limits shall be applicable to the first applicant only. Also the annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the secondary market. The ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.

The nominal value of Gold Bonds shall be in Indian Rupees fixed on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jeweler’s Association Limited, for the last 3 working days of the week preceding the subscription.

The issue price of the Gold Bonds will be 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

Sovereign Gold Bond interest

The interest on the Gold Bonds shall commence from the date of issue and shall be paid at a fixed rate of 2.50 percent per annum on the nominal value of the bond.

The interest shall be payable in half-yearly rests and the last interest shall be payable along with the principal on maturity.

Sovereign Gold Bond Payment

All payments for Gold Bonds shall be accepted in Indian Rupees through cash (up to a maximum of 20,000/-) or demand draft, or cheque or electronic banking

Sovereign Gold Bond Redemption

The Gold Bonds shall be repayable on the expiration of eight years from the date of the issue of the Bonds. The premature redemption of Gold Bonds may be permitted after fifth year from the date of issue of Bonds and such repayments will be made on next interest payment date. On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 working days, published by the India Bullion and Jewelers Association Limited.

Loan against Sovereign Gold Bond

  • The Gold Bonds issued under this Scheme may be used as collateral security for availing any such loans could be granted by marking lien on SGB appropriately.
  • The Loan to Value ratio as applicable to any ordinary gold loan mandated by the Reserve Bank of India shall also apply to the Bonds issued under this Scheme.

 Tax Treatment of interest on Sovereign Gold Bond

The interest on the Gold Bond shall be taxable as per the provisions of the Income-Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of these bonds to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on transfer of bond.

Sovereign Gold Bond Nomination

  • Nomination of and its cancellation can be made in prescribed Forms. 
  • An individual Non-Resident Indian may get the security transferred in his name on account of his being a nominee of a deceased investor; Provided that the Non-Resident investor shall need to hold the security till early redemption or till maturity. However, provided further that the interest and maturity proceeds of the investment shall not be repatriable.

Transfer of Sovereign Gold Bond

The Gold Bonds issued in the form of Stock Certificate are transferable by execution of an Instrument of transfer in Form ‘F’.

Trading of Sovereign Gold Bond

The Gold Bonds are eligible for trading from’ such date as may be notified by the Reserve Bank of India.

Furnishing of Financial transaction statement

Financial transaction statement that needs to be furnished under subsection (1) of section 285BA of the Act shall be furnished with respect to a financial year in Form No.61A and it shall be verified in the manner that has been indicated herein.

The statement referred to in sub-rule(1) will be furnished by every individual mentioned in column (3) of the Table below with respect to all the transactions of the nature and value that has been specified in the corresponding entry in column (2) of the said Table in accordance with the provisions of sub-rule (3), which are registered or recorded by him on or after April 1, 2016, namely.

All mentioned transactions are under Rule 114E

Sl.no. Value and Nature of transaction Reporting Person
1. Cash payment made for the purchase of pay orders or bank drafts or banker’s cheque of an amount that aggregates to Rs.10 lakh or more in one financial year. Cash payments that aggregate to Rs.10 lakh or more during a financial year, for the purchase of prepaid instruments that has been issued by the Reserve Bank of India under section 18 of the Payment and Settlement Systems Act of 2007 (51 of 2007) Co-operative bank or banking company to which the Banking Regulation Act, 1949 (10 of 1949) is applicable (including any bank or banking institution referred to in section 51 of that Act).
2. Cash deposits that aggregate to over Rs.10 lakh in one financial year, and in one or more accounts (other than a current account and time deposit) of a person. A co-operative bank or banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); Postmaster General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898).
3. One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to ten lakh rupees or more in a financial year of a person. A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); Postmaster General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898); Nidhi referred to in section 406 of the Companies Act, 2013 (18 of 2013); Non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (6 of 1934), to hold or accept deposit from public.
4. Payments made by any person of an amount that aggregates – Rs.1 lakh rupees or higher than that in cash, or Rs.10 lakh by other modes against bills raised through one or more credit cards provided to that person, in one financial year. A co-operative bank or banking company the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or any other company or institution issuing credit card.
5. Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring bonds or debentures issued by the company or institution (other than the amount received on account of renewal of the bond or debenture issued by that company). A company or institution issuing bonds or debentures.
6. Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring shares (including share application money) issued by the company. A company issuing shares.
7. Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to ten lakh rupees or more in a financial year. A company listed on a recognised stock exchange purchasing its own securities under section 68 of the Companies Act, 2013 (18 of 2013).
8. Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring units of one or more schemes of a Mutual Fund (other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund). A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund as may be duly authorised by the trustee in this behalf.
9. Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of traveler’s cheque or draft or any other instrument of an amount aggregating to ten lakh rupees or more during a financial year. Authorised person 11 as referred to in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).
10. Sale or purchase of immovable property by an individual for an amount of Rs.30 lakh or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more. Inspector-General appointed under section 3 of the Registration Act, 1908 or Registrar or Sub-Registrar appointed under section 6 of that Act.
11. Receipt of cash payment that exceeds Rs.2 lakh for sale, by an individual, of services or goods of any nature (other than those specified at Sl. Nos. 1 to 10 of this rule, if any.) Any person who is liable for audit under section 44AB of the Act.
12. Cash deposits during the period November 9, 2016 to December 30, 2016 that aggregates to – Rs.12,50,000 or more, in one or over one current account of an individual, or Rs.2,50,000 or more, in one or over one account of an individual, other than a current account. A co-operative or banking company to which Banking Regulation Act, 1949 (10 of 1949) is applicable (including any bank or banking institution referred to in section 51 of that Act). Postmaster General as referred to in the clause (j) of section 2 of the Indian Post Office Act of 1898 (6 of 1898).

Other transactions comes under Rule 114E

  1. The reporting person who is mentioned in column (3) of the Table under sub-rule (2) [(other than the persons at Number 10 and Number11)] will have to, while aggregating the amounts for determining the conditional amount for reporting with respect to any person as specified in column (2) of the above Table –
    1. Take into consideration all accounts of the same nature that has been specified in column (2) of the given Table that is maintained in respect of that individual during a financial year.
    2. Aggregate all transactions of similar nature as specified in column (2) of the given Table that has been recorded in respect to that individual during the financial year.
    3. Attribute the aggregated value or the entire value of the transaction to all individuals, in a case wherein the account is maintained or transaction is recorded in the name of over one individual.
    4. Apply the limit of threshold separately to withdrawals and deposits in respect of transaction specified in item © under column (2), against Number 1 of the above Table.
  2. The return in Form No. 61A referred to in sub-rule(1) will have to be furnished to the Joint Director of Income Tax (Intelligence and Criminal Investigation) or Director of Income tax (Intelligence and Criminal Investigation) through online electronic data transmission to a server that would be designated for this sole purpose under the digital signature of the individual specified in sub-rule (70

CHARITABLE TRUST RE- REGISTRATION

All existing trusts registered u/s 10(23C)/ 12A/80G have to re- register with the IT Department.

Income Tax Department vide Notification No. 19/2021 dated 26th March 2021 has prescribed the procedure for re- registration of trust u/s 10(23C)/ 12A/ SOG of the Income Tax Act, 1961.

Important points are as under:

  1. Re-registration u/s 80G/12A has to be done in Form No. l0A. (It seems that application for registration u/s 12A and 80G will have to be done separately. The clarification will be needed from the department in this regard as the application form is same for both the registrations.)
  2. The registration has to be done within a period of 3 months from 1′1 April 2021, i.e. upto 30-06-2021.
  3. The registration shall be valid for a period of 5 years.
  4. The subsequent registration at the end of 5 years shall be done in Form 10AB.
  5. Details to be furnished with re-registration:
    1. Certified copy of trust deed.
    1. Certificate of Registrar of Companies I Society Registration /Public Trust.
    1. FCRA Registration certificate, if registered.
    1. Old registration Certificate u/s 12A/ 80G.
    1. Audited Accounts of last 3 years.
    1. Notes on the activities of the trust/  institution.

Furnishing of the statement u/s 80G

From F.Y. 2021-22, every trust/  institution registered u/s 80G shall have to furnish statement of donations based on which the deduction will be available to the donors. The important points are as under:

  1. The details of donations have to be furnished in Form No. l0BD annually, on or before 31’1 May of the subsequent financial year (e.g. The statement for F.Y. 2021-22 will have to be furnished on or before 31-05-2022)
  • Following information shall be required to furnish the statement (Form l0BD) :
    • PAN  /  Aadhaar Number of the donor.
    • If PAN / Aadhaar is not available then either the passport No. / Elector’s photo identity / Driving License/ Ration Card/ Tax Payer identification Number where the person resides.
    • Type of donation i.e. Corpus / Specific Grant/ Others.
    • Mode of receipt – Cash/ Kind/ Electronic modes including Account Payee Cheque / Others.
    • After furnishing Form l0BD, every donor should be furnished certificate in Form 10BE on or before 31″May of the subsequent financial year.
    • The certificate in Form l0BE to be given to donor will be available for download from the website of the Income tax Department after furnishing of Form l0BD.

Note It is important to maintain complete record of all donors including PAN and address from 1-4-2021.